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Our pot of gold for medical research, but who benefits?

Larry Graham

There are proposals for a huge medical research fund but who will really benefit?

One of the big features of the federal budget that intrigued me is the huge medical research future fund. Future funds are mostly known as sovereign funds and are used by many countries; I have often argued that the Norwegian and Alaskan models are the ones we should mimic.

Both those funds are free from political interference and work on the principle of investing the proceeds of non-renewable resources to generate sustainable wealth that contributes to the wellbeing of the citizens of their respective jurisdictions.

Every Norwegian is now a crown millioniare and in Alaska, citizens receive an annual tax-free dividend from their fund.

With the proceeds of the privatisation of Telstra, the Howard government started their own peculiar version of a sovereign fund. None of that giving taxpayers benefits stuff for them, their non-renewable windfall fund was established to pay for the superannuation of public servants.

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The Barnett government started a state sovereign wealth fund underwritten by iron ore royalties; however in keeping with that curious Australian attitude of not wanting taxpayers to receive any benefits from sustainably generated wealth, the WA fund is to be used for infrastructure.

We can see from those examples that Australia has a rubbish record of using sovereign funds for the benefit of taxpayers; which make me wonder what the monster fund announced in the federal budget and worth a staggering $20 billion will do for them.

The budget shows that the cash for this fund will come from $5 of the $7 co-payment that taxpayers will now have to pay when they go to doctors and use out of hospital pathology and imaging services.

Apart from the government needing to find something really good to counter this really bad government impost, I wonder why we are doing this.

One of the reasons given is that Australia is good at medical research. If we got to be good at this form of research without having to take money off poor people to fund it, why is it necessary to start doing that now?

That aside, the establishment of this huge fund raises some very serious questions that simply do not have answers yet.

The first and fundamental question is who owns the results of the taxpayer funded research?

If it is the researchers, what does Australia actually get for its billions?

For example, if the fund underwrites research into, say, Alzheimer’s and the researchers find a cure, do all Australians with the disease get treated for free?

Surely if taxpayers have already paid for the research that provided the cure they should own it and be able to access it without charge.

The same can be said for any cure or treatment that draws on this fund for its research; why should taxpayers be charged twice?

The second question is what will the major and international drug companies be allowed to access or partner with this taxpayer-funded research fund?

If they are not allowed access, we could be missing out on, or duplicating, world-class research that is already underway; and that would be a bit silly.

But if they are allowed in, the reverse could happen and taxpayer funded research could be used to develop drugs and treatments that maximise drug company profits.

Should the government mandate that drugs developed using these taxpayer funds be produced in Australia? And should these drugs be free or attract further taxpayer subsidies by way of the Pharmaceutical Benefits Scheme?

It would be paradoxical if we used taxpayers’ money to assist research into serious diseases and health issues, only to make the consequential cures and treatments more expensive.

The third unanswered question revolves around the transfer of skills. Will researchers be able to develop and expand their research skills using taxpayer funds and then move to major drug companies?

If this is the case, taxpayers will be underwriting the skills development of major drug companies.

It makes sense to find the answers before the government starts collecting these billions and chucking them into this huge pot.

US President Bill Clinton provides some guidance on these matters because he intuitively understood that if a private company was first to accurately map the human genome they would have had a stranglehold on medicine and profits for years.

To overcome that ethical dilemma and protect public rights, Clinton invested heavily in a government project and placed the genome in tehepoublic arena where it can be used for the benefit of all.

That would be a very good example for our government to follow.

24 comments so far

This is exactly what I have been saying. Please excuse my scepticism but after the total disregard for the general public shown by the Abbott government I really can't see this fund benefiting anyone except big pharma and maybe a few recent graduates for a very short time. The money would be better spent in a space/time travel fund where by we could be the first to go back in time and visit the dark ages. Oh wait we got one of those already. Its called the Abbottron

Commenter

Abbottron 2000

Date and time

May 19, 2014, 7:29AM

I would need to see a transparent process of advertising for and selecting suitably qualified people to form a committee to research over a period of time the most appropriate model for choosing medical research projects and allocation of funds and releasing these findings to the public for open and informed debate by others including the media before I could take this seriously. Rather than Abbott just suddenly announcing like the re-introduction of Knights & Dames that this is what's happening. These types of decisions scare me about what could happen in this country if a nasty politician with a dark side was to become PM. We need to re-define the term democracy and tighten things up a little with the decision making.

Commenter

Peter

Date and time

May 19, 2014, 9:35AM

Don't forget the signing of the TPP, betcha something to do with it. Another Lib Scam.

Commenter

A country gal

Date and time

May 19, 2014, 5:34PM

Why don't you call it what it really is Graham, the beginning of the end of Medicare. The start of the removal of universal healthcare by excluding a huge section of the community, those on government support through the various pensions, the unemployed and also the working poor.Why would any government, at a time when their budget is claimed by them to be under stress, set up a fund like this and not use it to "balance the budget", which is in itself a lie as the stress they are talking about it many years away and can be taken care off over time as it starts to develop.Our problem is that we a two parties which are led by particularly idealogical drivers which are not for the benefit of the general populace, rather these are there for the "entitled", the haves and big business. It is time for a change.

Commenter

Zjonn

Location

Kwinana

Date and time

May 19, 2014, 7:44AM

The reason behind it seems pretty simple really. Our mining boom is dying, we can't manufacture anything cost competitively in Australia which us why our car industry died. So unless we want to become a tourism and natural resource pilliging economy (only).. We need to get an industry going that we can compete with internationally.. And medical research is a pretty good one.

We funded the CSIRO research that recently pulled 250 million in patent payments too.. Tax payers are funding the NBN and then paying to use it.. Taxpayers paid for Telecom and then paid to use it. How is this different? Clearly the liberals see medical research as being something that will benefit our economy going forward.. And they are probably right. We fund research at universities all the time and often those universities patent the results and benefit from them.. This is no different really. Clinton was wise about the genome issue though.. Perhaps the government will add a clause about potential usage to the agreement to anyone given money by the find that any discovery made from it owns a percentage to the public purse. (Or better yet, to the public themselves)

Commenter

nezmerize

Date and time

May 19, 2014, 8:34AM

I like your positivity but surely the fact that they are systematically disembowelling the CSIRO shows they don't really care much for successful funding models. Let's face it other countries are light years ahead of us in this field. We should be focussing on preventatives not cures which would have a much greater impact on our society or better yet renewable energy research.

Commenter

Abbottron 2000

Date and time

May 19, 2014, 9:09AM

they want peole to be mangeable,to live and die naturally at age appropriate time and to be fit to work and reproduce.So they need research to learn how remove any interferenceor impediments to their progress.,

Commenter

XXX

Date and time

May 19, 2014, 9:14AM

Is it just me or is there something quite morose about an industry that gets wealthy of off people being ill?

Commenter

Ryan James

Date and time

May 19, 2014, 9:21AM

It's not just you, although i'd argue it's a natural consequence of capitalism and how a heath system functions within that economic framework.

Commenter

Cheese

Date and time

May 19, 2014, 10:20AM

A very good point.

What is more weird about the fund though is that money is being taken from other research (including medical research!) funded by the ARC and CSIRO, to give back to the NHMRC at a later date. The dividends of the fund will not significantly eclipse the cut funding until the full 20 billion is committed (IF the full amount is committed) by 2020. A very bait and switch approach that allows the government to say 'look how committed to medical research we are'. It's just that it's research as a whole (and students) that are paying for it.